The overall goal of our research is to better understand normal in vivo mechanisms of pancreatic differentiation so that we may later apply this knowledge to the creation of engineered cells for replacement therapy and cure of insulin dependent diabetes mellitus. We have focused our studies on extracellular signaling mechanisms, since such pathways could more easily be applied to the stem cell populations currently available, and preliminary data in stem cell laboratories have shown some promising early success with the ability of these stem cell populations to be manipulated toward an insulin-positive phenotype. Our laboratory has extensive experience in the study of embryonic pancreatic development and, in particular, mesenchymal influences on pancreatic epithelial differentiation and lineage selection. In this grant proposal we wish to study the basic mechanisms of action of activin and BMP signaling in pancreatic lineage selection, as well as potential interplay between these two signaling pathways. Our central hypothesis is that these two pathways are critical to controlling endocrine (activin-induced) or exocrine/acinar (BMP-induced) differentiation, and that competition between these two pathways determines the net exocrine versus endocrine compartment differentiation in the early embryonic pancreas. In specific aim 1, we will better define the pathways and roles of activin signaling molecules and downstream smads, and then test the potential utility of activin pathways in engineering pancreatic endocrine cells from pancreatic epithelial precursor cells through simple smad-blocking studies. In specific aim 2, an analysis of specific aspects of the BMP signaling pathway and its inhibitors will be studied for a potential pro-exocrine and anti-endocrine role in pancreatic development. Lastly, since activin and BMP signaling are well known to affect one another, in specific aim 3 we will study potential mechanisms for interplay between these two signaling pathways that may contribute to overall lineage selection in the developing pancreas. Overall, through these proposed studies, we hope to better understand the specific extracellular signaling pathways that may be usable for the manipulation of stem cells or pancreatic progenitor cells into becoming insulin-positive beta-cells for the treatment of diabetes mellitus. [unreadable] [unreadable]